A cheque for $900 was received from a customer during December year 5

Question

A cheque for $900 was received from a customer during December year 5 for

merchandise to be delivered in year 6. Sales revenue was debited when the cheque was

received and cash was credited. Net income for year 5 would be:

a. Understated

b. Overstated

c. The right amount

A cheque for $900 was received from a customer during December year 5